that is readily available and inexpensive, a new crop of companies is bursting out of the gates to create products and services within a year of being founded.
"You don't have to hire dozens of engineers," says Robert Williams, CEO of SocialEyes, a social-video start-up that was founded in April 2010 and is close to announcing its first product. "You can use existing infrastructure and outsource other duties."Nowadays, that means taking advantage of cheaper building blocks from Google's application engine, Amazon.com's Web services and Facebook's authentication technology.
Burbn, maker of Instagram, a photo-sharing application available on the iPhone, has already amassed 2 million users in less than five months.
With a technology foundation in place, courtesy of services from Google and others, development cycles are shortening, giving new companies a competitive edge as they crank out services and rush to market. Start-ups can quickly test the viability of their wares and gain instant feedback, says Ted Schlein, managing partner at venture capital giant Kleiner Perkins Caufield & Byers.
A decade ago, it was pricey to start a company. But in the past few years, with each new breakthrough in Internet and mobile technology, "You can start a company for little money and run it almost anywhere," says Joe Beninato, CEO of Tello, a free customer-service rating application on the iPhone and iPad that launched this month. "It used to take the first $5 million to set up the infrastructure (with Sun Microsystems servers and Oracle databases)," he says. "Now, you pull out your credit card and spend $5,000 on Amazon Web services."
Jason Jones, CEO of Lift Audio, a small maker of audio products and headphones, streamlined costs by outsourcing administrative tasks to India and manufacturing to China. Lift Audio has an exclusive distribution deal with Amazon.com.
"We spend more time developing technology, and pass the savings to consumers," Jones says.
The process from "napkin to launch" can be as short as six to nine months. But founders still must recruit the right employees, which can be time-consuming, says Adeo Ressi, CEO of The Founder Institute, which helps people start businesses.
Speed is of the essence in this era of real-time Internet development, in which social media put a premium on fast, efficient customer service — for tech and non-tech companies. Before, a major new version of a software application would take 12 months to 18 months; now, it is monthly, if not daily, says entrepreneur Brad Feld.
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